Battery Powered Growth

October 19th, 2012 at 9:21 pm

The Obama administration’s initiatives to invest in advance battery technology often get a bad rap, mostly because there’s an ideological bias against government “picking winners.” That’s an unfortunate bias on many levels. The demand for increased battery capacity is growing across the globe and the game is on for who will be poised to capture market share.

–Every major auto maker is working on battery-powered cars and 40 hybrids or electric are already on the market;

–“…today’s electric vehicles are fueled for the equivalent of about $1 a gallon — and the next generation will bring even bigger savings.”

–The gov’t’s investments in this area have proven to be key seed capital, met at least dollar-for-dollar by private investors. Moreover, as is usually the case, as technology advances, prices come down:

Prior to this investment, a battery with a 100 mile range cost $33,000. Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015. As costs come down even further, the market for hybrids and electric vehicles – which has nearly doubled in the U.S. since last year – will grow even further.

Thanks to these developments, the US is on track to claim significant market share of global battery production and that’s helping to create jobs in lots of different places:

From the Dept of Energy link above:

This summer, Rockwood Lithium announced the opening of their expanded manufacturing facility in Kings Mountain, North Carolina. They have hired 75 workers and plan to hire even more as their business continues to grow.

The Delphi plant in Kokomo, Indiana, which had been hit by devastating layoffs during the great recession, is growing again as workers produce components for hybrid electric vehicles.

Earlier this year, EnerG2 celebrated the opening of its new electric vehicle battery components manufacturing facility in Albany, Oregon.

Envia Systems of Newark, California, building off technology invented at Argonne National Laboratory and developed with the help of a decade of sustained support by the Department of Energy, recently achieved a breakthrough that will triple the energy density of their batteries while cutting the cost of batteries in half.

To criticize these developments as picking winners, you’ve got to be wearing some pretty thick ideological blinders. To me, it looks like the recognition that a new, vital sector is poised to expand. We can watch from the sidelines or get in the game. Fortunately, we’ve chosen the latter so far.

*As I noted in a C-Span debate on trade and manufacturing policies, the Energy Dept. link also tells the A123 story I referenced in the debate. (h/t: GM)

9 comments in reply to "Battery Powered Growth"

In my mind there are two open issues with electric cars that will prevent their adoption.
1. Capacity <- this is the easy one, better technology, better materials.
2. Charging <- this is the hard one. The auto industry is now overly relying on home chargers which mitigate charging times by charging overnight. That solution ignores long trips, and people in apartments. However, there is no easy answer to charging. In order to get the same type of speed as with gasoline, you would need to have a 3MW charging station (that's a small powerplant, and all that power would have to go into a single vehicle, batteries don't normally work that way). The only really viable solution in my mind would be a type of battery quick chage, which would require batteries to be standardized. You would go to a service station, and a robotic arm would pull the battery and replace it wit a new one, similar to how automatic car washes work. The business would the be free to charge the reclaimed battery themselves. Alternaetly, outfit all parking meters with electrical outlets, but that does nothing for small towns.

As you certainly know, “picking winners” in this case means “picking somebody besides oil, gas, ethanol and coal as winners”. The people getting the cash always cry foul when somebody else gets some. It’s not ideological except insofar as “I deserve it all because I’m special!” is ideological.

Government (taxpayer) investment in new technology to benefit the public makes sense only if that technology is used by U.S. manufacturers operating in the U.S.

The past teaches that technology and licenses can end up overseas, where we may benefit from lower production costs, but we lose the jobs and the industries here that the research and investment originally enabled. Most countries realize that there is an obligation on the part of companies who receive help from the taxpayer to be good taxpayers themselves.

I keep hearing that line about how corporate profits/shareholder earnings are taxed twice.

The best lame argument I can come up with is: A corporation is a “person” who should pay taxes, then the shareholder is a separate person who should pay taxes on personal income. This seems at best incomplete.

Sure–good question–I’ll post this wkend. Meantime, tell him lots of income undergoes more than one round of taxation–earnings face payroll tax, income tax, sales tax, and often state taxes (though latter can be deducted for fed, if you owe fed taxes). I don’t hear him complaining about that.

I have studied alternatives extensively over the years (for my take on why alternatives are generally poor investments see http://sol-system.com/koxenrider/bok/energy_bogey.html). I include batteries amongst alternatives because if we had good ones we could very quickly move to grid sourced transportation energy and it is vastly easier to upgrade a relative few grid sources than it is to upgrade the millions of cars and trucks on the road. Better batteries will almost certainly need to come from pure research, something that is increasingly being foregone in the US. Contrary to popular thought, it is actually very difficult, even for well established researchers with PhDs, labs and past successful results, to get funding even for rather staid and predictable work. For wild, improbable research, particularly by ‘mavericks’ who lack the above credentials, the chance of getting funding is mathematically indistinguishable from zero. Sadly, the chance that a breakthrough will happen in the US shrinks by the second; look to China and, to a lesser extent, India, for such breakthroughs.

As a bit of not-self promotion, for those of you interested in quantitative reasons on why alternatives are not promising, see the blog Do The Math (http://physics.ucsd.edu/do-the-math/) where a physicist (who expected to prove alternative were viable) explains why we are all in deep doo doo with respect to alternatives picking up the slack.